Severn Crossing toll rises to £6 from January 1

DRIVERS will be charged £6 to take a car across the Severn Crossings from January 1, it was announced today.

DRIVERS will be charged £6 to take a car across the Severn Crossing from January 1, it was announced today.

Iestyn Davies of the Federation of Small Businesses in Wales condemned the move and pledged to raise it with Welsh Secretary Cheryl Gillan.

The M4 Business Network has warned that business may leave the area and called on the Welsh Government to address the rising costs.

There are concerns the rise will be a blow to tourism and will hurt of prospects of projects such as the Dylan Thomas-linked Browns hotel in Laugharne.

Plaid Cymru claimed the toll could be slashed by three-quarters and still provide the funds needed to maintain the bridges and Conservatives in the Assembly called for a freeze in the charge. However, the UK Government transport minister has said it cannot act to freeze the tolls.

Companies ranging from hauliers to compressed air specialists to Wales’ most famous pie-maker condemned the hike.

The FSB’s Mr Davies said: “We are appalled. It’s a further tax on business in Wales, particularly in the southeast. And with areas like Bristol looking to expand and build on [initiatives] such as enterprise zones this is a further slap in the face for businesses in Wales.”

Mr Davies said the rise from £5.70 to £6 came on top of rising fuel costs.

He said: “At the same time we don’t see the cost of rail decreasing or the reliability of the service increasing.”

The toll for small goods vehicles and buses will increase from £11.50 to £12.10; it will also rise from £17.20 to £18.10 for heavy goods vehicles and full-size buses.

Russell Shankland, director of Chepstow-based MCL Logistics, warned the rise would act as a “deterrent” against investment in a country that is “fighting hard to get off its financial knees”.

Plaid Cymru Westminster transport spokesman Jonathan Edwards MP said: “Each year the tolls on the Severn Bridges continue to rise alongside RPI, the higher measure of inflation, because of the inflexibility of the Westminster Act which introduced them. Estimates presented last year to the Welsh Affairs Committee suggested that the bridges cost £15m to operate but rake in £72m each year.

“The cost of an ordinary car crossing the Severn bridges could be cut by two-thirds or three-quarters and be self-sustaining. This would markedly reduce the impact on the Welsh economy of the tolls whilst still providing investment in Welsh road improvements if the right decisions were taken.

“The wider issue is that of ownership of the bridge once it is returned to public ownership later this decade. As the gateway to Wales, the Welsh Government must have a say in what happens to the Severn bridges, and its profits once that takes place, rather than have that money go back to the Treasury in London.

“As usual, the UK Government have so far refused to negotiate on this matter.”

During the week, Newport East Labour MP Jessica Morden said in the House of Commons that “high fuel prices are painful enough without the exorbitant cost of the Severn bridge tolls”.

Conservative Wales Office minister David Jones responded to her comments during Welsh Questions by saying: “As the honourable lady knows, the Severn bridge is privately operated. The franchise comes to an end in 2017, at which time the Government will consider their options.”

Today she pressed again for a freeze, saying: “I know local hauliers are under tremendous financial strain, as are commuters who are being hammered from every angle. Fuel is expensive, the bridge toll looks set to go up and train fares, if people are looking to avoid the other two increases, are also going up by RPI plus another 3%.

“The tolls should be frozen to ease the burden on local families and businesses.”

Byron Davies, Conservative Assembly Shadow Minister for Transport, agreed, saying: “This is another rise in the cost of living that will put further pressure on the budgets of Welsh families. Welsh Conservatives proposed a freeze on the Severn tolls for the next four years, which would have saved Welsh motorists £3.4m in 2012 alone.”

Charlie Dyer, general manager of Browns Hotel in Laugharne, Carmarthenshire, said: “Hundreds of thousands of pounds is being invested in making Browns a beautiful boutique hotel with a bar that’ll reflect the late 1940s and early 1950s when Dylan Thomas spent so much time here.

“We’re looking to open in the spring so little bits of news like this aren’t helpful. Given the current economic situation – and the continual rise in fuel costs – to impose a further increase on Severn Bridge Tolls is totally unacceptable.

“These increases simply inhibit all sectors and will undoubtedly have an impact on the tourism trade in south west Wales.”

Clare Morgan, marketing controller of Peter’s Pies, which employs around 550 people at its Bedwas headquarters, said: “We supply all the major retailers across the UK so the Severn Bridge is our one way in and one way out of Wales.

“Welsh economic growth must be given every possible assistance – another toll increase is simply another hindrance. Business costs rise and we risk the threat of becoming less competitive; surely we want to retain business in Wales, not jeopardise its future.”

Darren McAlister, director of Swansea-based insolvency practitioners McAlister & Co, said: “After a few years of growing the business across South Wales we’re now targeting the South West so the toll rise isn’t what we wanted to hear. We’ve just opened new offices in Weston-super-Mare and travel there will be frequent so an extra 5% on bridge fees will have a negative effect.”

Conservative Roads Minister Mike Penning said: “I recognise the importance of the Severn Crossings both locally and nationally and am committed to improving the experience for everyone who uses them. The Severn Crossings are run by a private concessionaire looking to regain the money it has invested and the Severn Bridges Act sets out the tolling arrangements and the basis for yearly increases.

“The tolls are in place to repay the construction and financing costs of the second Severn Crossing, the remaining debt from the first crossing and to maintain and operate both crossings. The Government cannot simply decide to freeze the tolls as any variation from this formula has to be agreed with the operator who will want some form of compensation.

“I understand people’s concerns and await with interest the outcome of a study commissioned by the Welsh Assembly Government into the impact of the tolls on the Welsh economy.”

On March 1 this year the Welsh Affairs committee published a report into the toll which concluded: “With running costs of £15m a year, and a current yearly income of £72m, we estimate that the toll could be reduced to a fifth of its current level, to approximately £1.50 while allowing the crossings to remain self-financing.”

Steve Sulley, chairman of the M4 Business Network and marketing partner at Newport-based chartered accountants UHY Peacheys said: “It is disappointing yet not altogether unexpected to see a further rise in the cost of using the Severn Bridge. The M4 is an essential link between south Wales and London and is imperative in fostering business links between Wales and the rest of the UK.

“In the majority of cases avoiding the bridge just isn't feasible so an increase in cost will make it increasingly difficult for Wales-based business to expand into England, and it puts up more of a barrier to those companies thinking of moving from England to Wales. Commercial vehicles face even higher costs leading to an impact in profitability.

“Unless the Welsh Government help businesses or subsidise bridge costs we will see more businesses leaving the area.”

Dave Howells, managing director of the Swansea-based compressed air specialist Ultra.air group, said: “This news is very topical for us as me and a colleague were in Bristol on Wednesday in the presence of Business Secretary Vince Cable. He was officially opening the fantastic new National Composites Centre, a key driver in his Government’s effort to keep the UK at the forefront of world-class manufacturing.

“We installed the centre’s substantial compressed air system and have an ongoing maintenance contract. The fee to cross the bridge is already exorbitant.

“How can the Severn River Crossing justify a 5% rise at a time like this? Coupled with rising fuel costs and a fragile economy, the increase is outrageous.

“Welsh businesses like us use this facility daily as we service many industries in Bristol and the South West. The increase serves as another tax on our business and ultimately reduces our competitiveness.”

The crossing is operated by the Severn Crossing River PLC but will switch to government ownership around 2017.

Financial statements show that in 2010 westbound traffic over the Severn bridge and second Severn crossing decreased by 0.8% with 12,428,765 toll-paying vehicles making the journey. Traffic decreased by 3.2% in 2009, following a 1.6% fall in 2008.

John Warman of the Campaign Against Severn Tolls (CAST) condemned the rise, saying: “I was shocked. This is going to be a bitter blow to all road users in the new year...

“This is going to have a big impact on the economy.”

Mr Warman said a “psychological barrier” had been crossed when the toll hit the £5 mark.

“The way it’s going up it won’t be too long before we have to get tenners out,” he said.

MCL Logistics’ Mr Shankland, said: “From a transport and logistics perspective, any increase to the day to day running cost is difficult to swallow in what is already a challenging environment. These costs are becoming increasingly difficult to manage for logistics companies as some customers are refusing to accept the rising price of transportation.

“As a country, Wales seems to be fighting hard to get off its financial knees and, rather than encouraging new investment, this increased charge is likely to act as a deterrent. If this continues, it is likely that we’ll get to a stage where people start considering just how much it costs to come into the country before they leave.

“In these auspicious times, we would hope for a decrease in tolls, not an increase.”

Bet Davies of the Wales Millennium Centre, said: “Ten percent of our theatre bookers in 2010 came from outside Wales, and we estimate that at least 5% of all bookers would have come across the Severn Bridge. Until now, we have not felt the impact of the economic squeeze on our attendances.

“However, any increases from bridge tolls to fuel increases in the New Year will have an impact on people’s disposable income and will influence their spending and their decisions to travel.”

A Welsh Government spokesman said: “The responsibility of setting toll rates on the Severn Crossing falls to Severn River Crossing Plc and the Department for Transport. This is not a devolved issue. We recently awarded a contract to Ove Arup to undertake a study into the impact of the Severn Crossing tolls, as well as assessing the overall balance of their effect on the Welsh economy.

“We expect their final report in the near future. The findings of this report will inform our discussions with the UK Government on the future of the tolling regime and will ensure that we can put any case for change to the UK Government on the basis of the best possible evidence.”

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